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Kansas City Gets New R&D Facility

DuPont Nutrition & Health has expanded its cheese R&D facility capabilities at its Kansas City metro area laboratory with the addition of several new pieces of equipment and expansion of its R&D innovation team.

DuPont Nutrition & Health serves the cheese and dairy industry with its portfolio of cultures, enzymes and tailored ingredients systems. The expansion in research and development fits into the company’s overall strategic prioritization of the cheese and dairy industry.

The Kansas facility will also be fitted out with all new equipment allowing the company to work and collaborate with its customers in a more direct and active way.

Roald Mason, DuPont Nutrition & Heath Director of dairy sales in North America says, “these improvements not only allow us to optimize our current cultures offerings and tailor them to our individual customers, but also equip us to develop new retail and finished products.”

Prior to this new investment in the plant, the DuPont team in Kansas City worked with the R&D facility in Wisconsin.

“This now makes the lab a self-sufficient operation to support our growing cultures and media product portfolio. We can now not only operate faster, but also get hands-on in most aspects of the cheese making process,” said Mason.

If you are a Kansas company conducting research and development within the states, you may qualify for the Kansas and Federal R&D Tax Credit. Contact a Swanson Reed specialist for further information.

State of the art R&D center opens in Iowa

The University of Iowa is now home to a state of the art research and development center. Applied Food Science (AFS), recently opened the multi-million-dollar R&D center in Iowa City, which consists of molecular biology labs, advanced analytical and material research laboratories, and a pilot production plant.

AFS are a natural ingredient supplier specializing in botanical extract for food, beverages and supplements. AFS source their ingredients in a manner which is both sustainable and socially responsible. The company seeks to create a solution for producing the healthiest organic products imaginable.

AFS are excited about the plans in store for the company’s endeavors to converge science with food. The primary R&D goals will consist of fostering the growth of plant-based science and testing how the evolution of food fits into the current and future food supply. These research outcomes will assist in not only continuing to feed the growing population, but also providing a healthier and more nutritionally sound food source.

AFS see the University of Iowa to be a great location to base their innovation center, as it beneficially positions them closer to farmers who feed the community, and processors who utilize plants for added-value end products. Additionally, the University of Iowa are renowned for their diligent work ethic, professionalism and innovative culture in the areas of biotechnology and food science, therefore the fit between the two industries deemed as appropriate.

Loretta Zapp, CEO of AFS, states that the following center is evidence of the company’s commitment to its customers and the enhanced value the company seeks to bring in their products. The R&D center will create an ideal environment to foster collaborative teams with the mission of touching all aspects of how food science advances can produce long term benefits in people’s health and wellness. Zappo is optimistic that the research outcomes will add even more value to the current offerings that include supply chain sustainability, innovation, formulation and manufacturing support.

To learn more about the Iowa R&D credit or the federal credit, contact a Swanson Reed specialist by clicking here.

Idaho Tech Sector Growing

Normally when it comes to the growing tech economy of a region the pattern goes as follows; the tech part comes first, usually from colleges and universities or emerging from established companies with large R&D budgets which then leads to emerging innovations leading to new companies, and those companies tend to leave to head to places such as Silicon Valley and Austin, Texas.

Idaho is a textbook example of this all too familiar pattern. Thanks to organizations such as the Idaho National Laboratory, Boise State University, the University of Idaho, Idaho State University, BYU Idaho, HP, Micron and Simplot, innovation has not been an issue. Idaho has experienced tremendous growth in the tech sector across the state over the past 10 years, but unfortunately Idaho tech entrepreneurs have had to look outside the state for capital.

This is changing. Venture-capital companies are settling within the region and the number of successful homegrown tech companies continues to increase.

If you are an Idaho company performing research and development, you may qualify for the the Idaho research credit. Contact a Swanson Reed specialist for more information.

An Unlikely Tech Hub Rising in Northern Louisiana

State agencies and leaders in private industry are working together to turn what locals call the I-20 corridor – Monroe, Shreveport and Ruston – into a prominent, self-sustaining tech ecosystem for capable professionals and internationally relevant innovation.

One of the first major public-private collaborations started in 2007 with the creation of the National Cyber Research Park and the Cyber Innovation Center in Bossier City, which hugs the Red River across from Shreveport.

The center has tried to deliver more tech employers to the region, including IBM, the Computer Sciences Corporation and CSRA, a tech services provider for government.

At a cybersecurity convention in Louisiana on March 8th, the center’s executive director and president, Craig Spohn, spoke to why the region has been behind, despite the headquarters being in Monroe.

“A single-employer community limits the attraction because people have nowhere to go other than that one organization,” siad Spohn.

Bill Bradley, senior vice president of cyber engineering and technology services at CenturyLink, welcomed the region’s new entrants and the thousands of jobs they have added.

The workers who have filled them are “bringing up children who will stay in the area they grew up in,” he said. “Those things have positive benefits for our state.”

If you are a local company performing research and development activities in Louisiana and are interested in claiming the R&D tax credit on the state or federal level, please contact a Swanson Reed specialist by clicking here.

Huge Handouts for Louisiana Biotech Startups Thanks to Local Biofund

The New Orleans BioFund, a low-interest loan program targeting biotech startups, has loaned $3 million to more than a dozen local startups.

The federal Department of Housing and Urban Development provided the first round of funding in late 2012 for the loan program. Loans ranged from $50,000 to $250,000 and went to small businesses in the 12-parish area affected by Hurricane Katrina.

The BioFund, based in the New Orleans BioInnovation Center downtown, have helped create 185 full-time equivalent jobs in south Louisiana through its investments in 15 startups.

The BioFund said the initial HUD funding is fully loaned out and is now being revolved for continued investments. The fund plans to move to a micro venture capital model moving forward.

Startups will be able to exchange ownership in the company for financing or secure a short-term loan. The fund will also offer loans that can be converted into ownership shares in the company at a later date, known as convertible debt financing.

Recipients of BioFund investments include Advanced Polymer Monitoring Technologies, a Tulane University-incubated company that has developed technology to improve industrial polymer production and pharmaceutical drug development. The startup received multiple investments to help it develop its technology.

InnoGenomics Technologies, which develops products for use in human forensics, used a BioFund loan to hire new staff and bring its first forensic testing kits to market. The startup is now exploring potential uses for its products in diagnosing certain cancers.

If you are a local company performing qualified research in Louisiana and are interested in claiming the research and development tax credit, click here to speak to one of our representatives for more information.

Seven Misconceptions About R&D Tax Credits

The Research and Development Tax Credit can be one of the most lucrative tax credits for businesses who conduct research based on scientific principles. Also, several key details of the tax credit changed with the Protecting Americans from Tax Hikes Act of 2015, or “PATH Act.” Find out whether one of these misconceptions has been preventing you from looking into the R&D Tax Credits.

1. The credit only applies to real scientific research

It is true that the tax credit only applies to research and development based on scientific principles, but that doesn’t mean that your business needs a laboratory full of scientists in long white coats. The R&D tax credit applies to any work done within your company to develop or improve a product. If your company is improving software, investigating more environmentally clean materials, or devoting resources to improving machinery and tools, you may qualify.

2. The credit only applies to big companies

This misconception was once true, but thanks to the PATH Act of 2015, small startups, defined as businesses with under $5 million in gross receipts and with fewer than five years of receipts, can claim up to $250,000 per year in R&D Tax Credits, which can offset Payroll Taxes for Social Security and Medicare.

3. The credit does not count against the minimum tax amount

This is another truth that became a myth thanks to the PATH Act. Previously, there was a minimum tax that businesses had to pay, meaning that small and medium-sized businesses could not necessarily benefit from the R&D Tax Credit. Now, however, businesses with less than $50 million in gross receipts can claim their R&D Tax Credit against their minimum tax liability.

4. It is too late to apply for the credit for previous years

In fact, the PATH Act makes it so that businesses can make a retrospective claim for R&D Tax Credits starting in 2015. If your company is only now realizing that it could have applied in the last couple years, it is not too late.

5. The tax credit only benefits companies who make a profit

Actually, the R&D Tax Credit can be carried forward to future years, which is especially useful for new businesses who have significant R&D costs for the first few years before they can bring their product to market.

6. The credit is only federal

More and more states have adopted some form of R&D Tax Credit, such that the number is up to 43 states. However, the amount for the credit varies wildly from state to state: it is only 1.25% in North Carolina, compared to 40% in Louisiana. Look into your state’s tax laws to determine whether there is a profitable R&D Tax Credit for you to take advantage of.

7. The credit does not apply to research with outside funding

It is true that grants and other outside funding normally make research and development unable to qualify for the R&D Tax Credit. However, if your business assumes financial risk, such as because the funding is contingent on the success of the research, then your business may still qualify for the Tax Credit.

Overall, the R&D Tax Credit became a different animal in 2015, and businesses should take a second look to see whether they can benefit from this lucrative law.

Top 5 Benefits of Research and Development Tax Credit

Is your business eligible for the research and development tax credit?

The R&D tax credit is a general business tax credit that was created to incentivize businesses to perform qualified research in the US. It was formed as a part of the Economic Recovery Tax Act of 1981 to provide an economic stimulus for businesses to contribute to research and development initiatives that would encourage investment in the US and thus build a stronger US economy.

The credit falls under section 41 of the Internal Revenue Code, allowing companies that incur research and development costs to receive a credit on their tax returns. If your industry or businesses performs work that is technological in nature, has a permitted purpose, participates in elimination of uncertainty, and follows a process of experimentation, it may be eligible for a tax credit that forms 6% of the total qualified research expenses (QRE) in the first three years.

What are the benefits of the R&D tax credit?

1) The Startup Business Benefit

The R&D tax credit is specifically designed to help all businesses finance research and development initiatives, and that means clear benefits for small and startup businesses who may not otherwise have the finances to invest in research and development. Startup companies with annual gross receipts under $5 million can apply up to $250,000 of the R&D credit against payroll liability, and that can help smaller companies invest in the research and innovation that will carry them forward in the global economy.

2) Increase Your Bottom Line

Not only can the R&D tax credit reduce your company’s federal and state tax liabilities, but it can also become an asset in itself by helping to increase the company’s market value. Money saved as a result of the tax credit can be carried forward and reinvested in further R&D initiatives, and that can further generate company growth and cash flow.

3) Motivate Innovation

Providing a credit for technological research and development can help you turn your business into a more innovative, forward moving business. Not only can that help your company to improve its products, processes, technology, and software, but that, in turn, can also help your business become more efficient, generate higher company profits, and become a stronger presence in the US economy.

4) Maintain Competitiveness

A tax incentive that rewards innovation can help a business become more efficient and gain the technological advancements that will help it become a stronger presence in an increasingly global marketplace. Research and technology developments can improve a company’s ability to compete with other industries, making it much more likely to succeed in a competitive market and thus enabling the US to better compete in the global economy.

5) The R&D Tax Credit Makes Investing in Research and Development Worthwhile

The R&D tax credit is available in almost all US states, and, regardless of size, companies that invest in research and development and are eligible for the credit can claim as much as $10 billion per year. It’s one of the largest tax credits available, making it one of the best investments businesses of all sizes can make.

Iowa Grants Over $42 million in R&D Tax Credits

More than 180 companies in Iowa were granted a tax credit refund in 2015 for conducting research and development activities within the state.

In total, 186 companies received more than $42 million in tax credit refunds last year from the state’s Research Activities Tax Credit program, the Iowa Department of Revenue reported.

The program awards tax credits to companies and individuals that conduct research inside of Iowa. Refunds are provided when tax credit claims made by a company or individual exceed the taxpayers’ state tax liability and they owe no state income tax.

Combined with refunds to individuals, the tax credit program paid out more than $44.4 million in tax credit refunds last year.

The total research activities tax credit claims made last year equaled around $57.1 million.

Overall, 1,031 individuals claimed more than $7 million while 248 corporations claimed more than $50.1 million of the tax credits. A large majority of those claims were made by just 20 companies.

Critics of the program have questioned why so few companies claim such a large part of the tax credits and why the state is providing companies with money when it’s on a tight budget.

Supporters of the research activities tax credit believe the tax credit helps the businesses decide where to locate and where to conduct their research. Providing the tax credit is an incentive to invest in Iowa.

To learn more about the Iowa R&D credit or the federal credit, contact a Swanson Reed specialist by clicking here.

Swanson Reed Approved as CPE Sponsor by NASBA

Swanson Reed has been certified by the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education (CPE).

Swanson Reed is authorized to provide CPE credit in the following areas:

Approved Subject Area : Taxation
Approved Delivery Method: Group Internet Based (webinars)

To view our company profile on the NASBA website, click here.

Industry Experts and Course Authors

Mike Flesher, Tax Director

Mike Flesher is the Tax Director at Swanson Reed. Mike holds a Bachelor of Science in Accountancy and a Master of Business Administration in Finance. He is an IRS Enrolled Agent and brings over 14 years of private sector accounting and cost analysis experience to Swanson Reed.

Cherie Jones, Director

Cherie Jones is the director at Swanson Reed responsible for the firm’s strategic direction, growth and success. Cherie holds over 10 years experience securing grants and energy management incentives for municipalities, state government and public work departments. She also brings over 5 years of experience in energy audits, benchmarking and facility management services to Swanson Reed. She is an expert in identifying critical improvements that lower facility operating costs.

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Have questions? Click here to contact a Swanson Reed specialist.

Battery powered motorcyle set to make new record

Hatfield will be collaborating with the Battery Innovation Center in Indiana, who will provide the cutting-edge technology required to turn achieve the long distance ride. The goal is going to be a tough one, when taking into consideration the longest electric vehicle range among commercially available motorcycles and cars is only 315 miles, a record that currently belongs to Tesla. Hatfield, however, thinks it is achievable, despite no gasoline bike currently being able to travel more than 320 miles on a single tank.

“We see ourselves as following in the footsteps of Tesla, and accomplishing the San Francisco-to-Los Angeles run would show that range anxiety is becoming a thing of the past,” he said.

Hatfield turned to the Battery Innovation Center in Indiana after liaising with its president, David Roberts. The center is a nonprofit that works with industry leaders, universities and government agencies to rapidly develop, test and commercialize batteries and storage systems that are safe, reliable and lightweight. The center, established in 2013, works out of a 36,000 square-foot purpose-built facility in the town of Newberry. Its partners and nonprofit members are varied and include the State of Indiana, the Japanese technology giant NEC and Duke Energy, one of the largest energy providers in the United States.

“We work with companies like Lightning to pair them with cutting edge energy storage makers to make things like the 500-mile ride possible,” Roberts said. “We think that with the technology as it stands, right now, the ride is entirely achievable.”